As many investors jumped back on the strengthening U.S. markets in recent weeks, many funneled billions into technology sector-related exchange traded funds to ride the momentum in the growth segment, but it has left many vulnerable to swift pullbacks.
Investors have been pouring money into technology shares at a rate not seen since the height of the dot-com bubble, Bloomberg reports.
The PowerShares QQQ (NasdaqGM: QQQ), which tracks the tech-heavy Nasdaq-100 Index, experienced $3.3 billion in net inflows over the past week and was the second most popular ETF trade, according to XTF data.
Many investors believed technology stocks could maintain their forward momentum as the Nasdaq-100 advanced almost 10% this year through Friday, or triple the S&P 500’s return.
“Nothing really positive has happened in tech, but it continues to receive inflows due to the fact that portfolio managers see tech as a secular growth story that simultaneously offers exposure to growth while also being somewhat insulated from other market forces,” Tom Essaye, founder of “The Sevens Report,” said.